Researchers at GSFCH recently found that in 2007, UCCMC paid more than $1.5 million to resolve a False Claims Act allegation. Specifically, Federal prosecutors alleged that UCCMC cardiologists systematically “up-coded” Medicare claims, falsifying patient diagnosis documentation and prescribing medically unnecessary heart medications. The U.S. Attorney on the case stated that “it is our job to hold accountable companies that make patient care decisions not on medical necessity, but instead on monetary gain.”
Jillian Stelladora, CEO of UCCMC at the time, explained that it was all just a “huge mix-up” and that UCCMC continues to exhibit one of the best quality care delivery records in the nation. She later resigned, and almost every individual on the management team was replaced by the Board within six months of the settlement decision. Finally, UCCMC entered into a federal corporate integrity agreement to improve its billing practices and prevent up-coding in the future. This agreement expired before Jennifer Nguyen became CEO.
Given this finding, you ask your researchers to “dig a bit deeper” into this allegation and to establish a more comprehensive due diligence plan.
What additional questions should the GSFCH researchers ask about UCCMC’s conduct?
What additional documents should they request of UCCMC?
How do you think this finding will affect the joint venture?
How might it affect any future merger or acquisition discussion?
Are there any facts in the preceding fact pattern that might mitigate the impact of this finding?